ABSTRACT
While China has gained some technological and manufacturing capabilities and achieved enormous success in exporting, the core of global competition, as we have seen in the previous chapters, has changed from manufacturing to networkcontrolling activities. This change will eventually make China’s cost-comparative advantage irrelevant in international competition. When designing industrial policies, Chinese leaders did, in fact, give consideration to incorporating some dynamic components into their development strategies. As early as in 1986, Deng Xiaoping pointed out the urgent need to ‘trace the development of the world strategic high technologies and develop China’s own high technologies’.
